Following its October budget proposal and subsequent commenting period, the NCUA Board has approved the 2024-2025 and Central Liquidity Budgets.
In October, the NCUA had proposed a substantial increase to its Operating budgets for 2024, up nearly $38 million from $344 million in 2023 to $382 million in 2024, an 11.0% increase.
The response from trade groups and credit unions alike was swift: the proposed budget increases were too high.
NCUA has in turn reduced its final budgeted amount for 2024’s Operating budget to $374.5 million, an 8.8% increase over 2023.
However, the Board has not substantially changed its budgeted amount for 2025, which it dropped from the original proposed Operating amount of $418.8 million to $418.4 million. Meaning rather than the original request of a 9.9% increase from 2024 to 2025, there would be an 11.7% increase to the Operating budget next year.
In a statement made by the NCUA, Chairman Todd Harper said: “The recommended budget before us represents a consensus. It includes compromises by all of us at the table. Give and take is essential to any organization’s policymaking and budgeting process, and the budget before us reflects that principle in action. This funding plan provides sound financial stewardship and will allow the NCUA to execute its financial stability and consumer financial protection missions over the next two years.”
Some may however be wondering what the NCUA is giving if its 2025 budget reflects no concessions by the organization, instead expecting to need the Operating budget of $418 million, nearly $100 million more than it did three years ago.
Industry veterans such as Chip Filson are already questioning the compromises NCUA is making and the lack of transparency in explaining why the increases are needed. In a blog detailing his initial observations, Filson points out the 16.4% increase in the federal credit union operating fee when “the Operating Fund’s cash on hand now would almost cover a full year’s expenses.”
Filson also points out “the increases in staff to a total of 23 and 20% budget raise to $6.4 million in the Asset Management and Assistance Center when the total reported losses to date in the NCUSIF are just $1.0 million.”
Information on the NCUA’s budget can be found on the Budget and Supplementary Materials page on NCUA.gov.
